One of the most common questions estate planning attorneys receive is the proverbial, “Should I have a will or a trust?” Although the answer to that question must be given in light of each client’s individual circumstances, one primary consideration in creating an inter vivos trust is the protection that it can afford beneficiaries upon death. One of those protections, for example, is the protection from future creditors or divorce.

This planning tool was recently highlighted in an unpublished opinion by the Court of Appeals of Virginia. In Montgomery v. Montgomery, wife in the divorce proceeding was a beneficiary of her parents’ trust and the survivor of her parents had recently passed away. Notably, the trust, at the death of both of the parents, provided that the assets should be distributed outright per stirpes to both kids, but the court found that it could not be attributed to wife in awarding spousal support because the trust granted the trustees the discretion to retain investments “for as long as the Trustee may deem appropriate, whether or not such assets satisfy the prudent investor standard, produce income or represent an over concentration in one investment.” The court found that because the distributions had not yet been made and the wife, who was only a co-trustee of her parents’ trust, had no authority to direct or require the distribution, the future beneficial interest was insufficient so as to be imputed to the wife as income in the divorce proceeding. The wife had not yet “inherited” the property and “the circuit court lacked the authority to reach into the trust to force wife and [the co-trustee]—who is not a party to th[e] divorce litigation—to dispose of trust property or to impute income to wife based upon undistributed trust assets.” You can view the opinion at this link.

In considering using a trust as an estate planning tool, clients should consider the likelihood that a beneficiary—even a remote or contingent beneficiary—will get divorced. The statistics and data collected showing the rate and number of marriages that end divorce are remarkable.

While the trials and tribulations that a beneficiary may have to endure in life are, of course, most often unforeseen and unpredictable, proper estate planning can truly not only protect an inheritance for a beneficiary so as to sustain them in times hardship, but also to sustain an inheritance to benefit future generations.

Hook Law Center: Kit Kat, what can you tell us about elephants and their fear of bees?

Kit Kat: Well, this is extremely interesting! It has long been known that the mighty elephant is very fearful of the tiny bee. One-on-one, the bee is not a threat to the elephant, but in swarms, they can be extremely annoying, especially if they get in the elephants’ trunk, mouth, or eyes. So with this knowledge, scientists have decided to turn this fear to the elephant’s advantage.

Elephants are at risk from farmers when they wander into fields and feast on certain crops. So instead of using electrified fences to keep the elephants out, scientists are conducting experiments in which beehives, alternated with fake hives, are strung every 20 meters around a farm’s perimeter. The success rate of keeping the elephants away is around 80%. There’s an added bonus in that the fences with beehives are significantly less expensive than electrified fences. Save the Elephants, a non-profit conservation group, estimates that the beehive-loaded fences cost 1/5 the cost of an electrified one. It’s also been discovered that a totally fake beehive fence doesn’t work. The elephants can detect that. There have to be some live bees buzzing to remind them of the danger. It turns out that elephants are quite intelligent!

The above discussion primarily refers to African elephants. Asian elephants behave a little differently. Scientists are not sure if that’s because the bees in Asia tend to be less aggressive. However, the fences are being tried on both continents. Dr. Lucy King of Oxford University in Great Britain, who is working on this project comments, ‘When I first started, I had to really persuade people to try it. They thought I was absolutely insane. Then they thought, well, she’s giving us free beehives, so whatever. Now people are queuing up to do it.’ If scaring away the elephants doesn’t work perfectly, they can at least make some money on the side with the sale of honey! It’s a win-win for everyone! (Karen Weintraub, “Elephants Are Very Scared of Bees. That Could Save Their Lives.” The New York Times (Science section), Jan.26, 2018)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Currently, more than 5 million Americans are living with dementia, and that number is expected to increase to over 16 million by the year 2050. While many aspects of dementia are still a mystery, the disease itself and many of its affects are familiar. Due to the eventual impairment to memory and executive decision-making skills, a person living with dementia will eventually need to stop driving. Unfortunately, many individuals living with dementia are shocked and dismayed to hear family members or a physician suggest they stop driving. The inability to drive represents a loss of freedom and the (very real) potential for isolation and confinement. In order to lessen the blow, it is important to prepare in advance for this eventuality.

First, it is important to recognize signs which may indicate that it is time for an individual with dementia to stop driving. In order to plan ahead, it is helpful if both the person with dementia as well as family and friends are familiar with this. Indications that it may be time to stop driving can include:

Failure to obey traffic signs

Getting lost in familiar places

Confusing the gas pedal with the brake

Difficulty staying in lane

Making poor choices about passing, stopping, and speed

Mysterious dents or scratches on the vehicle

Longer than typical drive times

Confusion or anger while driving

This list is not exhaustive but contains good examples of signs to watch for. If the person with dementia is educated in advance about these concerns and the possibility that driving may no longer be feasible, it tends to ease the transition when confronted with the situation.

When considering the need to stop driving and preparing for the eventuality, it is also helpful to have a plan in place so the individual with dementia can maintain some independence. Locating resources in advance is critical to this. Many counties have public transportation that can be easily arranged; some even have special transportation systems for older adults and adults with disabilities that can be arranged in advance. This alleviates the stress and concern which can surround locating a bus stop or train station. In addition, many senior centers will provide transportation to and from activities as will church groups. It may also be helpful for a family to consider in advance what transportation they may provide. Some families will agree in advance to schedule regular outings to grocery stores, department stores, restaurants, theaters, concerts, or other social events. If in place in advance, these outlines can alleviate much of the anxiety associated with the feeling of loss of freedom due to the loss of driving skills.

Some adults living with dementia will choose the time they are unable to drive as a time to move into either an older adult community or assisted living community. While not the right choice for everyone, these communities provide regular meals (alleviating the need for trips to the grocery store), prearranged shopping outings, and a large number of social activities which combats the feelings of isolation and depression that can exist when someone is no longer able to travel independently.

Some may be tempted to simply limit driving to familiar areas close to the home. However, professionals caution against this as the large majority of all accidents happen within close proximity to home. In addition, slowed reaction times and misjudgments which may occur with dementia are especially dangers in neighborhoods where children may be playing outside or pets may be darting into the road.

For many, driving represents freedom and independence and no longer being able to drive can feel as if one is being forced into confinement and isolation. However, being familiar with the signs as to when to stop driving and having a plan in place for that eventuality can make the transition smooth and easier for both the person with dementia and their friends, family, and caregivers.

Hook Law Center: Kit Kat, what can you tell us about how pigs are bred on commercial farms?

Kit Kat: Well, this is something I was unaware of until I read a recent article in The Virginian-Pilot. Smithfield Foods has made great progress in recently ending their previous practice of narrow stalls for pregnant pigs. The stalls were called “gestation crates,” and they were so small the pigs couldn’t turn around. At a cost of $360 million, their farms now use a system referred to as “group-housing systems.” This means that the pregnant pigs are kept in group pens or can move between pens and individual stalls. This change fulfills a promise the company made 10 years ago. In part, the company made the change as a response to pressure from animal rights groups and from large companies like McDonald’s, Kroger, Burger King, Harris Teeter, and others. There is still work to be done, however. Tyson Foods and Seaboard Foods continue to use the gestation crates.

Gestation crates came into use in the 1960s. There are some advantages—they kept pigs out of bad weather, facilitated medical care, and prevented the pigs’ waste from mixing into the feed. There is conflicting research on the matter. There were some advantages in that there was less aggression among the animals, and the number of litters increased. However, it was inhumane according to the Humane Society, and it led the way to change the practice. The Humane Society started their campaigns in several large states like Florida, California, Michigan, and Ohio, to name a few.

Smithfield Foods uses two types of group housing at its 200 sow farms across the nation. One is called “free-access,” which means that groups of 30-40 pigs live together, with access to individual stalls when they desire it. This accounts for about 25% of their farms. The other type is called “small group housing.” With this latter style, 5 – 6 pigs live together. Stewart Leeth, chief sustainability officer at Smithfield Foods comments, “When you put pregnant animals in together, the sows will have to establish a pecking order. There is some fighting involved, and once that kind of resolves itself…, they typically are fine.”

Smithfield Foods is making the transition at its international farms a bit more slowly. Farms in Romania and Poland have already changed, but other farms abroad are being given the deadline of 2022. If they have not converted by then, their contracts with Smithfield Foods will not be renewed. So kudos to Smithfield Foods! They’ve demonstrated that they are good, corporate citizens! (Elisha Sauers,“Finally, Smithfield’s sows get some relief.” The Virginian-Pilot, Jan. 24, 2018, p.1 & 11)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

Well, it’s that time of year again—cold and flu season! If you haven’t had either one, you’re extremely fortunate. Experts tell us that more than 60,000 people in the US have had the flu already this year. According to Margarita Rohr, a clinical instructor of medicine at New York University’s Langone Health, ‘This season is different because H3N2 is the predominant strain of flu. This is important because historically, this strain of flu has been associated with higher intensity of symptoms, more frequent hospitalizations and deaths.’

So here is a summary of the differences. Some symptoms are present in both cold and flu; however, there are some clear markers of the flu:

Flu symptoms are usually more intense. According to Dr. Rohr, ‘a major symptom of the flu is muscle and body aches, which can be severe.’ Colds may have body aches, but they are usually less severe.

Flu symptoms appear quickly. According to Dr. Ian Tong, chief medical officer at Doctor On Demand, colds develop more slowly. ‘You can go from well to sick within a few hours (if you have the flu),’ he says.

Your body will feel more run down with the flu. If you can force yourself to go to work, it’s probably a cold. However, if you feel completely exhausted, it probably is the flu. According to Dr. Rohr, the feeling of exhaustion may linger for weeks.

If you suspect that you have the flu, see a doctor as soon as possible for a prescription.

Medicines like Tamiflu can help reduce the time you are afflicted with the illness. However, you must not delay. ‘The treatment window for flu is usually within the first 48 hours of the onset of symptoms,’ Dr. Tong says. And of course, the other normal recommendations apply: gets plenty of rest, stay hydrated, eat well and include soups which can be an easy way to consume a lot of nutrients without a lot of cooking, and use a humidifier to open up breathing passages.

If your symptoms worsen, do not hesitate to return to the doctor for additional treatment. High fevers of 103 or 104 degrees Fahrenheit should not be ignored, warns Dr. Tong. Flu, also, can make one susceptible to other illnesses, like bronchitis, pneumonia, and sinusitis, according to Dr. Rohr.

Good luck this season! Listen to your body! It can tell you lots about yourself!

(Lindsay Holmes, “Do you have the flu or just a cold? Here’s how to tell. Health section of Huffington Post, 1-30-18)

Hook Law Center: Kit Kat, should people who receive food stamps (now known as SNAP for Supplemental Nutrition Assistance Program) be allowed to use them to buy pet food?

Kit Kat: Well, this is not a “yes” or “no” answer. The issue is complicated. It certainly is a worthy goal, since 14% of all households with pets make less than $25,000 a year. Current policy is that SNAP benefits cannot be used to buy pet food. It’s been that way since the program’s inception in 1964. Also, it would be hard to establish policies. A Chihuahua doesn’t eat as much as a Bernese mountain dog, for instance.

Edward B. Johnston, Jr. of Mississippi is going to try to have the policy changed. He sometimes has to share his meals with his dog, which is really not ideal for his dog’s health. He petitioned the Department of Agriculture along with 80,000 other people on the petition site Care2, as well as several animal welfare organizations. It’s a problem not unique to him. The ASPCA estimated in 2015 that 30% of low-income people who gave up their pets for adoption did so because of the cost of feeding a pet, which is approximately $235 per year, according to the Pet Products Association.

Until a decision is made, charities and companies like PetSmart fill the gap. Some food banks have food for pets, and PetSmart has joined Feeding America to distribute pet food to their national network of food banks. It’s not a perfect solution. Some like Mr. Johnston, who resides in rural Mississippi, lives 2.5 hours from the nearest food bank. The closest animal shelter is in another county. He wrote in his petition, ‘Being poor is hard enough without being expected to give up your companion.’ He intends to keep fighting. (Caitlin Dewey, “The surprising argument for extending food stamps to pets,” The Washington Post, January 23, 2018)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

The Tax Cuts and Jobs Act (“TCJA”) resulted in major changes to the individual and corporate income tax rates that take effect January 1, 2018.

Rate changes for individuals. Individuals are subject to income tax on “ordinary income,” such as compensation, and most retirement and interest income, at increasing rates that apply to different ranges of income depending on their filing status (single; married filing jointly; married filing separately; and head of household). Currently for the 2017 tax year, those rates are 10%, 15%, 25%, 28%, 33%, 35%, and 39.6%.

Effective January 1, 2018, and continuing through 2025, there will continue to be seven tax brackets for individuals, but their percentage rates will change to: 10%, 12%, 22%, 24%, 32%, 35%, and 37%.

Bottom line. While these changes will lower rates at many income levels, determining the overall impact on any particular individual or family will depend on a variety of other changes made by the TCJA, including increases in the standard deduction, loss of personal and dependency exemptions, a dollar limit on itemized deductions for state and local taxes, and changes to the child tax credit and the taxation of a child’s unearned income, known as the Kiddie Tax.

Capital gain rates. Three tax brackets currently apply to net capital gains, including certain kinds of dividends, of individuals and other noncorporate taxpayers: 0% for net capital gain that would be taxed at the 10% or 15% rate if it were ordinary income; 15% for gain that would be taxed above 15% and below 39.6% if it were ordinary income, or 20% for gain that would be taxed at the 39.6% ordinary income rate.

The TCJA, generally, keeps the existing rates and breakpoints on net capital gains and qualified dividends. For 2018, the 15% breakpoint is: $77,200 for joint returns (half this amount for married taxpayers filing separately), $51,700 for heads of household, and $38,600 for other unmarried individuals. The 20% breakpoint is $479,000 for joint returns (half this amount for married taxpayers filing separately), $452,400 for heads of household, and $425,800 for any other individual (other than an estate or trust).

It is important to note that these new individual income tax rates are effective for your 2018 tax return and will not affect your tax on the return you will soon file for 2017. However, they will almost immediately affect the amount of your wage withholding and the amount, if any, of estimated tax that you may need to pay.

Corporate income tax rate drops. C corporations currently are subject to graduated tax rates of 15% for taxable income up to $50,000, 25% (over $50,000 to $75,000), 34% (over $75,000 to $10,000,000), and 35% (over $10,000,000). Beginning January 1, 2018, the TCJA makes the corporate tax rate a flat 21%. It also eliminates the corporate alternative minimum tax.

I hope this information provides helpful insight on the changes to individual and corporate tax rates. For more details, please see the Hook Law Center Memorandum on our website at Tax Cuts 2017. If you wish to discuss how these changes or any of the other many changes in the TCJA could affect your particular tax situation, please call our office at 757-399-7506.

Hook Law Center: Kit Kat, what can you tell us about the pets who were left stranded in Puerto Rico after the hurricane?

Kit Kat: Well, this is a heart-warming story in which a group from Virginia came to the rescue. It was several months in the making. Mirah Horowtiz, a lawyer and animal lover from Arlington, VA, who runs Lucky Dog Animal Rescue, spearheaded the effort. Southwest Airlines is also to be commended, because they donated the entire flight with volunteer pilots and flight attendants free of charge. It took a while for the emergency rescue of people to subside and Southwest’s schedule to clear, but eventually Southwest gave her the date of Jan.20, leaving from Baltimore-Washington International Airport. The Boeing 737 left Baltimore filled with supplies such as pet food, Clorox, wipes, trash bags, and diapers. The return flight was filled with 120 stray cats and stray dogs (satos in Spanish). Hundreds of animals became strays during the hurricane, as their owners sought shelter and did not have time to make arrangements for their pets.

The flight back to the United States was such a happy one! The entire crew was so dedicated to their mission. Flight attendant Janice Goravica volunteered to assist on the flight with the specific intention of looking for a new dog. Her previous pet, a black lab named Duke, died 4 years ago. Only now did she feel ready to bond with a new pet. She chose another black lab named Coscu. Once they landed, there was a crowd waiting to meet the furry group. Most were adopted on the spot. If you are interested in adopting one of the pets from Puerto Rico who still need homes, you can go to the Lucky Dog website. As Sonia Collazo, a lady from Puerto Rico who came to Virginia 10 years ago said, ‘You cannot forget the dogs. When you forget the dogs, you forget what a good life means.’

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

It is not uncommon for clients to come into the office with bank and brokerage accounts held jointly with another. The common explanation received for such titling is to enable the joint account holder to handler the individual’s personal affairs. One of the most important things an estate planning or elder law attorney can do for a client is to explain the importance of asset titling, and its effects. Incorrect titling can completely disrupt an estate plan.

Most often, joint accounts are held with a right of survivorship. In Virginia, the institutions must provide the account owner with the option to designate the account as joint without a right of survivorship. In my five-year career, I have yet to see any joint account held without a right of survivorship, despite the fact that I am most often told that the additional account holder was added merely for convenience purposes, such as assisting with bill payments during life and accessibility to immediate funds to cover funeral expenses upon death. The problem, however, is that a laypersons understanding of this designation is muddied by the advice of non-lawyers.

A joint account held with a right of survivorship will pass to the other account holder(s) upon the death of another. This means that the account will not pass in accordance with a Will or Trust that was created by the deceased account holder. The account holder will have no legal obligation to carry out your testamentary wishes, and the estate or the estate beneficiaries will be left to prove the account was not really intended to provide the other account holder with an ownership interest, but for convenience purposes.

This problem most often arises when one child is named as a joint account holder to help a parent pay their bills in their later years. Although this child often has a power of attorney, rather than just add the child as an authorized user by putting the power of attorney to record at the financial institution the child is actually added to the account. Clients have explained to me that when they tried to record the power of attorney that the employee of the financial institution informed them to just add the individual to the account because it was easier. The problem is that the same employee never explained the designation between “with” or “without” survivorship, or that there was an option. As a result, those clients didn’t realize that one child could inherit the funds of the account to the detriment of the other children. While some children may feel they have a moral obligation to allocate funds as expressed in a Will or Trust, others will not.

This is also an important issue in blended marriages. Spouses commonly own joint assets. In blended families, there is always a concern that the surviving spouse will create an estate plan to the detriment of the other spouse’s intended beneficiaries. If the surviving spouse inherits 100% of a joint account, the surviving spouse’s estate plan controls. If the first spouse to die wanted to leave something to their child, whether at their death or at the death of the second to die, they would be unable to have any ability to do so from a jointly-held asset.

Because of the issues associated, we often recommend that people avoid creating joint accounts unless they truly intend for that one individual to inherit the entire account upon their death. While this may be contrary to the advice of non-lawyers, clients often understand why this recommendation is made after a detailed discussion.

Hook Law Center: Kit Kat, what happened to the alligators who got trapped in water that usually doesn’t freeze in Snowmageddon, the big snowstorm on January 4th and 5th?

Kit Kat: Well, that is an interesting question. Actually, the alligators fared quite well. Take, for example, the alligators that live in Shallotte River Swamp Park in southeastern North Carolina. This is about the furthest point north that alligators can live. According to George Howard, the park’s general manager, he started to notice what he thought were cypress knees—woody projections from tree roots—poking through the waters of the swamp. On closer examination, he realized they were tips of alligators’ heads sticking out of the water, so they could continue to breathe. He comments, ‘They have been around for millions of years. They are one of the only species in existence that is virtually unchanged. And they continue to be good at just surviving. This is just another example of how tough they are.’ He’s got a recording, so he can show others what happened. They may look dead, but they’re not. He even pulled one out of the water to prove his point.

The phenomenon of brumation refers to the slowing of metabolic functions in reptiles. It’s the cold-blooded animal’s closest approximation to hibernation, though it is not really hibernation at all. Their bodily functions just slow down to the point that they’re not even digesting food. However, once the weather warms, they’re right back to normal. He plans to film that, too. When the weather is cold, but not icy, alligators spend their time at the bottom of the swamp or burrowing in the mud. The ice forced them to come to the surface to continue to get air.

Other examples of brumating animals are iguanas and turtles. While the north and mid-south endured Snowmageddon, Florida experienced temperatures in the 40s. That was low enough to cause iguanas to fall from their preferred tree habitat and land on patios and pool decks. However, they weren’t dead. Once the weather warmed, they were back in action scurrying around like they normally do. So, too, with turtles, who went into a low metabolic state to survive the cold snap.

Nature does have a marvelous way of helping all of its creatures adapt to the change of seasons! It so interesting to watch and be part of this grand universe! (Cleve R. Wootson Jr., “These alligators spent days trapped in swamp ice—and survived,” The Washington Post, (Animalia section), January 9, 2018)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

With tax time fast approaching, what a better time to clean out those file cabinets. But how long should you keep your documents? Below are some recommendations and general guidelines.

Taxes

Typically, you should keep your federal income tax returns and supporting documentation for at least seven years. Review this link to see what the Internal Revenue Service recommends. The IRS has several different periods of limitation. Most significantly, if you have ever failed to file a tax return or have ever filed a fraudulent return, you should keep records indefinitely. The best practice is to keep your records for the longest period of limitation recommended by the IRS. But also be sure to check with individual insurance companies or creditors where applicable.You should keep your Virginia tax returns and supporting documentation for the same length of time, at least seven years. The Virginia Department of Taxation recommends keeping your records for three years from either the due date of the return or the date the return was filed (whichever is later) unless the Internal Revenue Service suggests otherwise.

Therefore, keep all of your tax records for the same length of time at least seven years if not longer.

Contracts

How long you should keep a contract and supporting documentation varies. At a minimum, you should keep a contract for the length of time that you (or the other party) could file a lawsuit. This length of time is determined by the terms of your contract and the laws in your state. While the terms of your contract may control this length of time, each state law provides a statute of limitations as well. A statute of limitations is a law that bars a party from filing a claim after a specified period of time. In Virginia, the statute of limitations for a contract also depends on the type of contract. In general, the statute of limitations for a written contract is five years and for an oral contract, it is three years. See Va. Code § 8.01-246 for exceptions.

Credit Card and Bank Statements

Review this link for a recommendation from the FDIC as to how long to keep credit card statements and bank statements.

Investment Accounts

Consider keeping investment account statements for the life of your investment, plus seven years for tax purposes.

Documents From A Decedent’s Estate

A great number of our clients serve as a personal representative (either an executor or administrator) of a loved one’s estate. And serving in that capacity requires a great deal of record keeping. How long should you keep those records? The answer to that question depends on the type of records. For example, if they are tax records, see recommendation from the IRS.In addition to considering what type of document it is, a personal representative of an estate should also keep all accounting records, supporting documentation, and related correspondence for at least ten years (or longer if the specific document so requires). While a breach of fiduciary duty claim is typically subject to a much short statute of limitations, a final accounting may be subject to a suit to surcharge and falsify for up to ten years by some individuals. See Va. Code § 8.01-245.

This should provide you with basic guidelines from various sources to help you trim your file cabinets. Opinions, however, vary as to the exact dates for retaining records and the specific situation of every case. There are also many important documents that should be kept indefinitely. This article is not intended to substitute legal advice and when in doubt, always contact an attorney. If you have any questions or concerns, please feel free to call the Hook Law Center, P.C. and we will be happy to assist you.

Hook Law Center: Kit Kat, what can you tell us about Piper, the border collie, who worked at the airport in Traverse City, Michigan, clearing the airfield of birds, geese, foxes, and groundhogs?

Kit Kat: Well, this is such a heartfelt story. Piper was a devoted helper and pet to the Traverse City airport operations manager, Brian Edwards. His short life of 9 years was a very productive one. Besides being a devoted pet, he worked the last 3 years of his life as the airport’s K-9 wildlife control officer. He was extremely good at it, too. During his tenure, he had chased away approximately 8,367 birds from the runways, as well as an assortment of other critters who posed threats to air safety.

He became somewhat of an internet star when pictures of him in eye goggles and his work vest hit social media. He was a very good-looking dog with black and white markings. His telegenic face captured in a photo won him a US Coast Guard-sponsored contest. Edwards adopted him at age 2, and they became inseparable. However, he was so much more than his looks. He usually worked 40 hours per week. Edwards had to train him to do the job, and he learned quickly. He first started by doing what he called ‘passive training,’ –just letting him hang out at the airport getting used to the noise. Then, he acclimated him to wearing goggles—all necessary skills for airport work.

Edwards did not publicize Piper’s illness (prostate cancer) which was diagnosed in January 2016. Piper really didn’t suffer from the condition until December 2017. Then he was having extreme difficulty urinating. He had his bladder drained a few times, but on January 3, the cancer overtook him. Edwards draped Piper’s body with a US flag from the Coast Guard air station at the airport and posted that picture to Piper’s Instagram account with the caption—‘Airport K-9 Piper is off-duty.’ Piper will indeed be missed by many. (Karin Bruillard, “RIP Piper, a heroic dog who kept airport runways safe,” The Washington Post, (Animalia section), January 5, 2018)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

The professionals at Hook Law Center are frequently asked to assist our clients with estate, long-term care, and investment planning. Unfortunately, we often find that our clients have made significant mistakes in their investment planning. These mistakes jeopardize our clients’ ability to provide for their support and to leave inheritances to their children. In some cases, these clients may run out of money needed for their support because of the investment mistakes.

For example, we recently met with a couple in their 80s to discuss their long-term care planning. The wife was in the early stages of Parkinson’s disease. Their combined annual income was about $30,000. They owned their home and about $400,000 of investments. On the advice of their “commission-based” investment advisor, about 80% of their investments were in illiquid real estate investment trusts (REITs). This elderly couple was taking too much risk by concentrating their investments in one asset class, and they may suffer a significant loss when they sell the REITs to pay for the wife’s care. Other elderly clients have invested too large a percentage of their investments in deferred variable annuities with significant withdrawal penalties.

To avoid investment errors, Hook Law Center recommends that our clients: Put their investment and estate planning goals in writing. Although a professional advisor can assist the client with this responsibility, the client should not delegate this task to the professional. In making investment decisions, the client should not deviate from the client’s stated goals and objectives; however, the client should annually review and revise these goals as necessary.

Obtain investment advice from “fee-based” advisors rather than from “commission-based” advisors. Commissions create conflicts of interest because a commission-based advisor is compensated for making money from the client rather than for the client. Hook Law Center thinks that commissions were the reason that the elderly couple discussed above was advised to invest 80% of their funds in REITs.

Do not rely on their emotions. It will lead them to sell at market lows and invest at market highs.

Save. Save. Save.

Do not speculate. When clients play the market or day-trade, they are gambling on their ability to beat the pros. They will lose.

Do not invest primarily for “tax reasons.” Tax shelters are frequently poor investments.

Do not consider the client’s home as an investment. Think of it as a place where the client and the client’s family live.

Reduce investment risks and increase returns by allocating investments among different asset classes, like large cap stocks, small cap stocks, REITs, foreign stocks, and bonds.

Monitor investment performance on a quarterly basis and re-balance their investment allocation annually.

Hook Law Center thinks that a competent fee-based investment advisor can assist our clients in accomplishing their estate, long-term care, and investment goals. To better assist our clients with such investments and advice we have recently added Amanda L. Richter to our professional team. Amanda graduated from Old Dominion University in 2007 with a business administration degree, with a concentration in accounting. She specializes in taxation of individuals, estates and trusts, small business and not-for-profit organizations. Prior to joining the Firm, Amanda was a Partner at a medium-size accounting firm in Hampton Roads where she worked on a wide range of individual, fiduciary, partnership and corporate tax returns as well as audit engagements. She is a member of the American Institute of Certified Public Accountants and the Virginia Society of Certified Public Accountants.

Kit Kat: Well, I am happy to report that there is a cat rescue team operating out of the Norfolk Naval Station which is known as Cat Team 7. Last year (2017), the team rescued about 70 cats and kittens. Some of these were feral. None of the cats can be re-released on to the base because of a Department of Defense policy. After they are spayed and neutered, Cat Team 7 then transfers them to animal shelters or volunteers who foster them until they can be adopted. The feral felines have found placements with farmers. Farmers find them to be great at pest control, and at a much lower cost.

The felines sneak on to the base along the shoreline. They then hang out at a running track and picnic tables on base. Despite signs saying not to feed them, visitors tend do so anyway. With their numbers multiplying, they had become a threat to protected migratory birds. Cat Team 7, thus, is a win for everyone.

If you would like to assist Cat Team 7, Caitlyn McIntosh, team coordinator, recommends either donating money or supplies, such as litter, food, and carriers. Or you could adopt one of these lovely creatures. For donations, contact the team at catteam7norfolk@gmail.com. To view cats which can be adopted, go to tinyurl.com/yawqy4s2 or www.facebook.com/catteam7/. There’s a whole lot of neat kitties waiting to love you! (Courtney Mabeus, “Cat rescue team at Navy base placed 70 in ’17,” The Virginian-Pilot, 12-28-17, p. 1 and 7)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

The Tax Cuts and Jobs Act of 2017 (“TCJA”) was enacted into law on December 22, 2017. The TCJA represents the most significant overhaul of the Internal Revenue Code in more than 30 years. Many proponents of the bill believe that the overall concept of cutting the corporate tax rate and simplifying many of the complex provisions of the internal revenue code will stimulate economic growth and thus overall prosperity. Those opposing the bill believe that the potential tax increase on the middle class will cause economic decline. The exact impact remains to be seen but some of the more interesting provisions of the bill are summarized below.

Individual Taxes & Rates

New Income tax rates & brackets:

The TCJA also provides four tax rates for estates and trusts: 10%, 24%, 35%, and 37%.

Standard deduction increased:

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the standard deduction is increased to $24,000 for married individuals filing a joint return, $18,000 for head-of-household filers, and $12,000 for all other taxpayers, adjusted for inflation in tax years beginning after 2018.

AMT retained, with higher exemption amounts:

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the TCJA increases the Alternative Minimum Tax Exemption (“AMT exemption”) and phases out amounts for individuals.

Beginning in 2018, the AMT exemption amounts are:

$109,400 for married individuals filing jointly or surviving spouses;

$70,300 for single or head of household filers; and

$54,700 for married individuals filing separately (i.e., 50 percent of the amount for married individuals filing jointly).

The AMT exemption amounts will phase out for taxpayers at $500,000 for single individuals and $1 Million for married couples.

Personal Deductions, Exclusions & Credits

State and Local Tax Deduction: For tax years beginning after Dec. 31, 2017 and before January 1, 2026, an individual taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for a married taxpayer filing a separate return) for the aggregate of (i) State and local property taxes; and (ii) State and local income paid or accrued in the tax year. To avoid this limitation, an individual may not claim an itemized deduction in 2017 on a pre-payment of income tax for a future tax year.

Personal Exemptions:

For 2017, the personal exemption amount is $4,050.

The TCJA provides that, for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, the exemption amount is zero.

Mortgage and home equity indebtedness interest deduction:

For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the deduction for interest on home mortgage indebtedness is temporarily limited to interest on acquisition debt. The deduction for acquisition mortgage interest is limited to underlying indebtedness of up to $750,000 ($375,000 for married taxpayers filing separately). The new lower limit doesn’t apply to any acquisition indebtedness incurred before Dec. 15, 2017.

The deduction for interest on acquisition mortgage indebtedness applies to debt incurred in acquiring, constructing, or substantially improving a qualified residence and which is secured by the residence.

A qualified residence for this purpose includes the taxpayer’s principal residence and one other residence such as a vacation home that is not rented out at any time during the tax year or that is used by the taxpayer for a minimum number of days. A qualified residence can be a house, condominium, cooperative, mobile home, house trailer, or boat.

Additionally, beginning Jan. 1, 2018, taxpayers may not claim a deduction for existing and new interest on home equity debt.

Medical expense deduction:

For tax years beginning after Dec. 31, 2016 and ending before Jan. 1, 2019, the threshold on medical expense deductions is reduced to 7.5% for all taxpayers.

Alimony deduction by payer and inclusion by payee suspended: For any divorce or separation agreement executed after Dec. 31, 2018, or executed before that date but modified thereafter (if such modification expressly provides that the new amendments apply), alimony and separate maintenance payments are not deductible by the spouse making the payment and are not included in the income of the payee spouse. Income used for the payment of alimony is taxed at the rates applicable to the spouse making the payment.

Charitable Deduction: The TCJA increases the contribution-base percentage limit for tax years beginning after Dec. 31, 2017, and before Jan. 1, 2026, for deductions of cash contributions by individuals to 50% charities from 50% to 60% (the “60% limit”). Other TCJA provisions reduce charitable giving incentives.

Miscellaneous itemized deductions suspended: For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, the deduction for miscellaneous itemized deductions that are subject to the 2% floor is suspended. Therefore, the following expenses may not be deducted:

unreimbursed employee business expenses(including expenses for travel, lodging, meals, entertainment, continuing education, subscriptions to professional journals, union or professional dues, professional uniforms, job hunting, and business use of an employee’s home);

Limitation on itemized deductions suspended: Under prior law, an individual whose adjusted gross income exceeds an applicable threshold amount (for example in 2017, $266,700 for single taxpayers and $313,800 for joint filers) must reduce the total of his itemized deductions. For tax years beginning after Dec. 31, 2017 and before Jan. 1, 2026, this reduction of itemized deductions is suspended.

Affordable Care Act

Individual Mandate: For months beginning after Dec. 31, 2018, the amount of the individual shared responsibility payment is reduced to zero.

The net result of these changes is that no shared responsibility payment will be required after 2018, nor will there be any penalty imposed for failing to maintain minimum essential coverage.

This revision will likely reduce the number of healthy people seeking coverage beginning in 2019, therefore increasing premiums.

Net Investment Tax and Additional Medicare Tax: The TCJA leaves intact the 3.8% net investment income tax and the 0.9% additional Medicare tax, both enacted by the Affordable Care Act.

Estate & Gift Tax Retained with Increased Exemption

Estate & Gift Taxes:

For estates of decedents dying and gifts made after Dec. 31, 2017 and before Jan. 1, 2026, the TCJA doubles the base estate and gift tax exemption amount from $5 million to $10 million. The $10 million amount is indexed for inflation occurring after 2011 and is expected to be approximately $11.2 million in 2018 ($22.4 million per married couple).

In addition to the increase in the basic exclusion amount, the TCJA modifies the computation of gift tax payable and estate tax payable in cases where gifts have been made in prior years. With respect to the computation of gift tax payable, the tax rates in effect at the time of the decedent’s death are to be used rather than the rates that were in effect at the time the gifts were made

These are just a few of the changes made in the newest tax bill. For more detail, please see the Hook Law Center Memorandum on our website at Tax Cuts 2017.

Hook Law Center: Kit Kat, what can you tell us about golden retrievers and how that breed of dog may lead researchers to new information about all dogs?

Kit Kat: Well, this is an interesting situation. Since 2012, there has been a longitudinal study of more than 3,000 golden retrievers from across the United States to learn more about the causes of cancer. Golden retrievers were chosen because cancer prevalence is slightly higher in the breed. Also, since they are the third most popular breed, it was easier to find subjects to participate. The study which is called the Golden Retriever Lifetime Study is a $32 million research project undertaken by Colorado State University and the Morris Animal Foundation. All the dogs in the study were enrolled before age 2, and they will be followed for the rest of their lives. Researchers hope to learn whether golden retrievers really are more prone to cancer, or whether there is more cancer in the breed just because there are more of them.

It is the first and largest longitudinal study of pets. Goldens lead their lives among humans, doing many of the same activities they do. According to Rodney Page, a veterinary oncologist at Colorado State, “They basically reflect a lot of the same exposures and activities that we have.” For example, preliminary data from the study reveals that 1 in 5 goldens sleep with their owners, 40 percent swim at least once a week, and 22 percent drink or eat from a plastic bowl. Researchers hope there may be implications for humans and the treatment of their cancers. After all, goldens who do have cancer at present, are treated with the same drugs that humans are. Stay tuned as we learn more about goldens, cancer, and what treatments are the most effective. (Karin Bruillard, “How 3,000 very good golden retrievers could help all dogs live longer,” The Washington Post, December 14, 2017)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

All eyes have been on Congress in recent weeks to see what would happen with regard to tax reform. Republicans released their final tax bill on Friday, December 15, 2017, and we were pleased to learn that not only does it retain the medical expense deduction, but it also temporarily expands it for two years.

The medical expense deduction previously permitted an individual who spends more than 10% of his adjusted gross income (AGI) on qualified unreimbursed medical expenses to deduct those expenses on his federal individual income tax return, provided the individual itemizes. The new tax bill, however, provides that taxpayers who itemize their deductions may write off qualifying medical expenses that exceed 7.5% of their AGI for the tax years 2017 and 2018. After that, the threshold will return to 10%.

Deductible medical expenses include preventive care, treatment, surgeries, dental and vision care, psychiatric treatment, prescription medications, prescription eyeglasses, contacts, false teeth, hearing aids, and long-term care expenses. Qualified long-term care services must be necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and maintenance and personal care services required by a chronically ill individual and provided under a plan of care prescribed by a licensed health care practitioner. To qualify as chronically ill, an individual must be certified by a licensed health care practitioner (e.g., a physician, registered professional nurse, or licensed social worker) as being unable to perform without substantial assistance from another individual at least two activities of daily living for a period of at least 90 days due to a loss of functional capacity, or as requiring substantial supervision for protection due to severe cognitive impairment, such as memory loss or disorientation. The licensed health care practitioner should prepare a letter certifying that the individual is chronically ill based upon the previously stated criteria.

Prior to December 15th, the future of the medical expense deduction was unclear. An earlier version of the tax bill proposed its elimination, which would have resulted in a higher tax bill for nearly 9 million Americans.

Kit Kat: Well, you probably wouldn’t guess this in a million years! Mary Lee is a great white shark that was tagged in 2012 off Cape Cod, Massachusetts. Her tag hasn’t pinged since June of this year (2017). Scientists are baffled as to the cause. It could be that the battery has died in the device, or the device has fallen off, or organic material has grown over the sensor rendering it inoperative. The scientific community and the general public miss her, because her whereabouts were followed by 129,000 people on Twitter. She was a huge specimen weighing nearly 3,500 pounds and having a length of 16 feet. She is one of the largest sharks ever tagged—that was part of her uniqueness. Chris Fischer, founder of Ocearch.org, which tagged her and other sharks, estimates she is between 40 and 50 years of age.

She became an ambassador of sorts for the shark community. For the five years that her transmitter transmitted signals, scientists learned a lot about the travel patterns of great whites. Originally tagged in Massachusetts in 2012, by 2015, she was off the coast of North Carolina and Virginia. From their other data points, they estimate she is probably now swimming along the coast of South Carolina or Georgia. Her various sightings, which occur when she surfaces long enough to activate a wet-dry sensor, led to Jim Ware, a digital specialist with the Wilmington Star News, creating posts on Twitter with the handle @MaryLeeShark. According to Mr. Ware, “The (Twitter) account really took on a life of its own. It just kept going and going. And it spawned many other shark Twitter accounts.” This past June (2017) was the last Mary Lee has been heard from. Stay tuned for more information on Mary Lee. We’re not giving up on her just yet. (Lee Tolliver, “America’s most famous shark has gone silent. We may never hear from her again,” The Virginian-Pilot, Dec. 18,2017, p. 1 & 7)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

On December 14, 2017, in Donal A. Irvin, in his capacity as Executor of the Estate of Declan Patrick Irving v. Carol DiVito, et al, the Virginia Supreme Court recently opined that a handwritten amendment to a Will, drafted wholly in the handwriting of the decedent and then initialed by him, was not a valid codicil. Although you will often hear attorneys advise against homemade estate plans or amendments, this case emphasizes the importance of professionally drafted documents, and even more so when there is a major life change.

After Declan Irving’s passing on March 30, 2014, his brother, Donal Irving, found two notes addressed to him which indicated that Declan’s Will was with a local law firm. Donal was unsuccessful in obtaining an original from the law firm, because they only had an electronic copy, and subsequently located the original Will in a briefcase within Declan’s self-storage unit.

The Will, despite language to the contrary contained in a property settlement agreement executed during a divorce, identified Patrick Irving as Declan’s son, but named Declan’s siblings and parents as beneficiaries of his estate, with Donal serving as Executor. Across a binder tab in Declan’s estate planning binder, Declan has written the following, in cursive, with his initials affixed thereto:

11/17/03

I wish to remove Patrick as my son entirely from this will – no benefits.

The binder tab was admitted to the Circuit Court for probate, but it was rejected as an invalid codicil to the Will. Donal appealed the decision, contending the writing was a holographic codicil as permitted by the code, or otherwise intended as a codicil. Despite the finding that the writing was in fact made by Declan, the court concluded that it was not clear that Declan intended to utilize initials as a signature, since he had signed his full name on other documents, and that the writing merely established a thought or plan to change a Will, and as a result, had no testamentary intent.

A holographic will is validly established when the will is wholly in the testator’s handwriting and signed by the testator as proved by at least two disinterested witnesses. While initials may serve as a signature, whether initials are intended to serve as a signature is dependent upon the facts of each case. The Virginia Supreme Court, in upholding the lower court’s opinion, found that Declan’s initials appeared at the end of the writing and thus provided authentication. However, in considering the case, the Virginia Supreme Court found that the lower court appropriately relied on extrinsic evidence, such as the use of a full signature on Declan’s property settlement agreement and Will, and a referred to his will without mentioning the writing.

In the event that a writing fails to comply with the requirements set forth above, the proponent can nonetheless establish the writing when clear and convincing evidence demonstrates that the will was intended by the decedent to serve as the decedent’s will or alteration thereof. When a court determines that there may be some testamentary intent, it should look to extrinsic evidence to determine the nature of the writing. The Virginia Supreme Court found that the failure to mention codicil in his note to Donal and the failure to sign the writing in the same manner as other legal documents demonstrated that Declan did not consider the writing to be a codicil to his Will. As a result, there was a finding that the burden of clear and convincing evidence of testamentary intent was not met.

While the lay person may disagree with the court’s determination, the case demonstrates the importance of professionally documented documents. And, while Hook Law Center, P.C. often educates our clients and prospective clients that estate plans are more than just documents, it is important to note that the construction is critical. As a result, when making important changes to your documents, you should consider seeking professional guidance.

Hook Law Center: Kit Kat, what can you tell us about coyotes in Hampton Roads (southeastern Virginia)?

Kit Kat: Well, once again, there is an interesting story to tell. Coyotes are not native to Virginia, but they now can be found in all parts of the state. Wildlife experts believe they first appeared in the western part of Virginia in the 1950s. They made their way here, according to Mike Fies, a biologist with the state game department, by either of two routes—one from Canada to the Northeast corridor; the other from the south and west where they probably crossed the Mississippi River in winter when it was frozen. In Hampton Roads, Mr. Fies estimates they number in the hundreds.

They like urban areas. They don’t have to contend with their #1 enemy—the wolf. They are mostly nocturnal, so people frequently confuse them with a German shepherd or some other dog. The coyotes found in Hampton Roads do have some small percentage dog (about 10 per cent) in their makeup due to inbreeding when their regular mates could not be found. Also, in urban areas, they are not hunted. It is illegal to do so. So here they thrive.

If you respect their space, you have nothing to fear. Usually, if they become aggressive, it’s because they may feel threatened, for example, if a dog gets too close. A dog is seen as a competitor. They are becoming emboldened, however, as to where they seek to live. They have been spotted at the traffic circle on Laskin Rd. near the oceanfront, Ft. Story, Regent University, a Yorktown oil refinery, and a backyard garage in Smithfield. According to Kevin Cornwell, the owner of a wildlife control business based in Carrollton, “When it comes to coyotes, every generation seems to be a littles less afraid of humans.” So don’t think your eyesight is playing tricks on you. If you see something which resembles a coyote, it probably is! (Joanne Kimberlin, “The Coyote Next Door,” The Virginian-Pilot, December 10, 2017, pg.1 and pg. 13)

Hook Law Center encourages you to share this newsletter with anyone who is interested in issues pertaining to the elderly, the disabled and their advocates. The information in this newsletter may be copied and distributed, without charge and without permission, but with appropriate citation to Hook Law Center, P.C. If you are interested in a free subscription to the Hook Law Center News, then please telephone us at 757-399-7506, e-mail us at mail@hooklawcenter.com or fax us at 757-397-1267.

The Hook Law Center (formerly Oast & Hook) offices are located in Virginia Beach, and Suffolk, convenient to the Peninsula, and Southside including the cities of Chesapeake, the Eastern Shore, Franklin, Hampton, Isle of Wight, Newport News, Norfolk, Poquoson, Portsmouth, Richmond, Smithfield, Suffolk, Virginia Beach, Williamsburg, Yorktown and Zuni. Content by elder law attorney, Andrew Hook and the Hook Law Center staff.